RDC Fare Watch April 2017 - Rejoice - Fares are up in April! But beware the lie of Easter...

30 May 2017

Since we started producing these fare watch articles back in January, every overall figure (i.e. not airline/country specific) we have had to report on has been negative. That has all changed this month, as fares in April 2017 are up 10% on April 2016.

Fares in April 2017 versus 2016 by purchase point

But you’d be wrong to take these figures out of context. Easter fell in April this year rather than March as was the case last year, meaning fares would almost certainly go up this month compared to April 2016. As we reported last month, the reverse effect caused fares to be down 17.5% in March 2017.

If we look at March and April as a combined two-month period, taking into account the relative passenger numbers in each month, this balances out as an overall drop in fares of -2.9%, which is demonstrated in the chart below.

Change in fares, March and April 2017 versus 2016 by purchase point

Interestingly, in the combined dataset, 1 week fares are still up (just) – so even adjusting for Easter we do still have one positive figure to report on. As we have observed in previous months, while overall fares are clearly down, fares 1 week before departure are holding their own. This suggests that any decline is in the leisure market and the business market remains relatively robust. Another possible explanation is that business passengers are switching to low cost airlines in difficult times – this was certainly observed in the years following the 2008 financial crisis.

Our final chart this month shows the year-on-year fare performance since the start of last year. As can be seen, the yellow line representing 1 week fares has tracked above the weighted average (and even further above the 3 month fare) consistently since October.

Change in fares by month compared to previous year, Jan-2016 to Apr-2017

By adjusting for Easter, we can also see what appears to be a settling market. The last 4 months have, in the context of the past 2 years, have been fairly encouraging. So far in 2017, fares have on average been down 4.8% compared to last year. This is the best 4 month performance since February 2016 – is the end of the tunnel in sight?